U.S. stock index futures experienced modest increases in evening trading on Wednesday, building on a positive session for Wall Street. This uptick followed recent data indicating a slight cooling in consumer inflation for July, heightening expectations for a potential decrease in interest rates.
The S&P 500 Futures advanced by 0.1% to 5,479.75 points, while Nasdaq 100 Futures also rose 0.1%, reaching 19,133.0 points by 7:20 PM ET (11:20 PM GMT). The Dow Jones Futures increased by 0.1%, settling at 40,152.0 points.
Fed Rate Cut Anticipated Amid Cooling Inflation
Recent Consumer Price Index (CPI) and Producer Price Index (PPI) reports revealed a modest slowdown in inflation, with the CPI dipping to a 2.9% annual rate in July, slightly below expectations, though it increased by 0.3% month-on-month.
These inflation figures have bolstered expectations of an interest rate cut by the Federal Reserve, with market observers now anticipating a reduction of 25 basis points in September, rather than the previously speculated 50 basis points, according to CME FedWatch data.
Lower interest rates are generally favorable for the stock market, as they improve liquidity and potentially stimulate economic growth.
Wall Street Hits Two-Week Highs as Market Volatility Eases
On Wednesday, Wall Street indexes climbed to their highest levels in two weeks, extending a rebound from the previous week as recession concerns diminished and market volatility subsided. The S&P 500 gained 0.4% to 5,455.21 points, while the NASDAQ Composite inched up to 17,189.05 points. The Dow Jones Industrial Average rose 0.6% to 40,008.39 points.
The prospect of lower interest rates has led investors to shift funds from major technology stocks to more economically sensitive sectors, resulting in increased inflows into value stocks.
Upcoming Economic Reports and Earnings
Economic indicators scheduled for release on Thursday include industrial production and retail sales figures, which are expected to offer further insights into the economy’s performance. Additionally, Walmart Inc. (NYSE: WMT) will report its quarterly earnings, which are closely watched as a barometer for retail demand. This announcement follows Home Depot Inc.’s (NYSE: HD) recent report of a weaker annual profit and a larger-than-expected decline in annual comparable sales.
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